76 LEGAL IMPACTS OF COVID-19 IN THE TOURISM INDUSTRY the current temporary framework. Besides, the budgets notified under the current Temporary Framework have also been of a much larger scale169. This is partly due to the fact that the economic consequences of the COVID-19 pandemic and the related curfew measures have hit immediately almost the whole economy of each Member State, while in 2008 the crisis originated from a single sector, the area of financial services, and had negative spill-over effects in other sectors. Among the sectors damaged by the current crisis, tourism is one of the most severely hit, and currently there are only forecasts when and if the previous demand in this sector would return or would return at all. This is why certain sectoral associations like the Airports Council International were not satisfied with the possibilities allowed by the Commission and asked for even more170, partly forgetting that some Member States have deeper pockets than others or just simply would like to handle the economic impact of the epidemic with lower amounts of State aid. From this follows our next finding. Not only did the Commission show significant flexibility by adopting the Temporary Framework a year ago, but it was also not afraid to further modify and extend it with a very speed procedure five times already. The modifications all pointed to the same direction, i.e. introducing further aid categories and making the compatibility conditions even more relaxed171. Having more and more information about the impact of the pandemic, the Commission has temporarily pushed back its basic principle to allow operating aid only with strict limitations, by introducing the possibility to finance from State resources the uncovered fixed costs of undertakings. This in practice means keeping certain undertakings on an economic breathing machine, which is in general a red flag of State aid policy as this is contrary to the principles of free and undistorted markets and usually does not provide any long term societal benefits either. Thus, creating a Temporary Framework was an expected reply from the Commission to handle the negative impacts, but modifying it five times 169 The notification of very high budgets might be traced back to two factors. First, if the budget is high enough there is no need for notifying additional amounts to be used as under State aid procedural rules only 20% above the original notified budget can be disbursed without the need for a second approval form the Commission (See the judgment in case C-510/16 Carrefour Hypermarchés SAS and Others v Ministre des Finances et des Comptes publics). Second, the relaxing the EU budgetary rules in March 2020 also give some comfort to Member States to spend as much as they see appropriate without having fear to be sanctioned for that. 170 Source: https://mailchi.mp/55ed46b91146/bcb9uj8rkl-748232?e=71bff3df80 (accessed on 1 March 2021). 171 Reconsidering the application of the Temporary Framework for undertakings in difficulty, raising the thresholds in points 3.1 and 3.12 in 2021.
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